This rule requires all pits and open-top tanks over 16 feet be
screened, netted, or covered.

Exception to this rule may be obtained by showing that the pit or
open-top tank is not a hazard to migratory birds or that an
alternate method other than those indicated will be installed to
prevent the facility from becoming a hazard to migratory birds.

To obtain the above exception, it will be necessary to submit OCD
Form C-134 to the appropriate district office for approval. A
copy of this form is attached.

July 26, 1989

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STATE OF NEW MEXICO
ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT
OIL CONSERVATION DIVISION

IN THE MATTER OF THE HEARING CALLED BY THE OIL CONSERVATION
COMMISSION OF NEW MEXICO FOR THE PURPOSE OF CONSIDERING:

CASE NO. 9672
ORDER NO. R-8952

APPLICATION OF THE OIL CONSERVATION DIVISION TO CONSIDER AMEND-
MENTS TO DIVISION RULES 8, 105, 312, 313, AND 711 TO REQUIRE
APPROPRIATE MEASURES BE TAKEN TO PREVENT LOSS OF MIGRATORY
WATERFOWL RESULTING FROM CONTACT WITH OILY WASTE IN OIL FIELD
OPERATIONS.

ORDER OF THE COMMISSION
BY THE COMMISSION:

This cause came on for hearing at 9:00 A.M. on June 15, 1989, at
Santa Fe, New Mexico, before the Oil Conservation Commission of
New Mexico, hereinafter referred to as the
"Commission."

NOW, on this 20th day of June, 1989, the Commission, a quorum
being present, having considered the testimony presented and the
exhibits received at said hearing, and being fully advised in the
premises,

FINDS:

(1) That due public notice having been given as required by law,
the Commission has jurisdiction of this cause and the subject
matter thereof.

(2) In the fall of 1988, the United States Fish and Wildlife
Service informed the New Mexico Oil Conservation Division (OCD)
that significant loss of migratory waterfowl has occurred and is
occurring due to contact with oily waste in pools, tanks and
ponds in the oil fields of New Mexico.

(3) The OCD Director convened an industry meeting on December 15,
1988, to determine if action by the OCD was necessary. As a
result of that meeting, a Committee was appointed to review the
matter, and that Committee submitted proposed rules to be
considered for adoption by the Commission.

(4) The Committee's recommended proposed rules were submitted to
industry, the public, and to government agencies for comment and
comments have been received.

(5) On May 18, 1989, the Commission held a hearing and took
testimony, written evidence and comments regarding the problem
and proposed rules to address the problem. The Commission
accepted for record the Committee minutes, report and comments,
and other correspondence and documents related to the problem and
alternative solutions.

(6) The U.S. Fish and Wildlife Special Agent with Law Enforcement
testified that he collected 694 dead birds or bird parts from 10
to 12 field trips made to Southeastern New Mexico between May
1988 and April 1989. An additional 100 to 150 dead birds were
observed but not collected. On a one-day trip to Northwest New
Mexico, one dead duck was found in a water disposal site.

(7) Open pits, ponds and large tanks used in conjunction with oil
field operations present a potential hazard to migratory
waterfowl, and protective measures should be required to prevent
significant loss of birds.

(8) Pits used in conjunction with drilling and workover
activities are non-hazardous during such operations and
afterwards, provided oil is removed therefrom or the pits are
netted immediately following the cessation of operations.

(9) The evidence was incomplete and inconclusive regarding the
hazard to migratory waterfowl presented by small fiberglass
tanks, whether above or below ground. While no protective
measures are needed at this time for such tanks, operators, the
OCD and Fish and Wildlife should continue to gather and examine
data to determine whether protective measures should be required.

(10) OCD rules prohibit the storage or retention of oil in
earthen reservoirs, but occasional small accumulations of oil on
pits, ponds or tanks can occur during normal operations, and any
reference in the rules adopted hereby to keeping such facilities
free of oil is likely to be difficult to monitor and enforce.

(11) Because of the diverse nature of sites, pits and ponds in
the oil field, exceptions to statewide rules should be available
to operators who can show either that there are alternative
methods of protecting migratory birds or that their facility is
not hazardous to migratory birds.

(12) Operators should consider taking additional precautions to
render their facilities non-hazardous to migratory birds because
the federal Migratory Bird Treaty Act prohibits unauthorized bird
kills and federal law authorizes criminal penalties of up to
$10,000 per bird.

(13) Cooperative efforts should be established and maintained
between industry and state and federal government agencies to
further quantify migratory bird losses, where they are taking
place, and to work together to develop economical means to
prevent such future losses.

IT IS THEREFORE ORDERED THAT:

(1) Division Rule 8 is hereby amended to read in its entirety as
shown on Exhibit "A" attached to and made a part of
this order.

(2) Division Rule 105 is hereby amended to read in its entirety
as shown on Exhibit "B" attached to and made a part of
this order.

(3) Division Rule 312 is hereby amended to add a new Paragraph
(h) and re-number the existing Paragraphs (h) and (i) as shown on
Exhibit "C" attached to and made a part of this order.

(4) Division Rule 313 is hereby amended to read in its entirety
as shown on Exhibit "D" attached to and made a part of
this order.

(5) Division Rule 711 is hereby amended to add a new Paragraph I
and re-number Paragraphs I, J and K as shown on Exhibit
"E" attached to and made a part of this order.

(6) The effective date of this order and amended Rules 8, 105,
312, 313 and 711 shall be September 1, 1989.

(7) Jurisdiction of this cause is retained for the entry of such
further orders as the Commission may deem necessary.

DONE at Santa Fe, New Mexico, on the day and year hereinabove
designated.

STATE OF NEW MEXICO
OIL CONSERVATION COMMISSION

Signed by

WILLIAM R. HUMPHRIES, Member

Signed by

ERLING A. BROSTUEN, Member

Signed by

WILLIAM J. LEMAY, Chairman and Secretary

S E A L

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RULE 8. EXPOSED PITS/LINED PITS/BELOW GRADE TANKS

(a) After January 1, 1986, lined pits and below grade
tanks may be used to contain produced water,
sediment oil, tank bottoms, miscellaneous hydrocarbons, or
other fluids subject to the jurisdiction of the Division
under the Oil and Gas Act only upon prior approval of the
Division. Applications for approval of lined pits or below
grade tanks should be made in accordance with applicable
special rules or, in the absence of special rules, in
accordance with Division "Guidelines".

(b) To protect migratory birds, all tanks exceeding 16 feet
in diameter, exposed pits and ponds shall be screened, netted
or covered. Upon written application by the operator, an
exception to
screening, netting or covering of a facility may be granted
by the district supervisor upon a showing
that an alternative method will protect migratory birds or
that the facility is not hazardous to
migratory birds.

EXHIBIT "A"
CASE NO. 9672
Order No. R-8952

RULE 105. PIT FOR CLAY, SHALE, DRILL FLUID, AND DRILL
CUTTINGS.

a. In order to assure a supply of proper material for
mud-laden fluid to confine oil, gas, or water to
their native strata during the drilling of any well, operators
shall provide before drilling is commenced an adequate pit for
the accumulation of drill cuttings. Drilling fluids and drill
cuttings must be disposed of at the well site in a manner to
prevent contamination to surface or subsurface waters. Removal of
drilling fluids or drill cuttings for offsite disposal will be
permitted only by approval of the appropriate Division district
supervisor.

b. To protect migratory birds, pits used for drilling,
completion, blowdown, workover or an emergency immediately after
cessation of the activity must have oil removed from their
surface or be screened, netted or covered.

EXHIBIT "B"
CASE NO. 9672
Order No. R-8952

RULE 312. TREATING PLANTS

(h) To protect migratory birds, all tanks exceeding 16 feet in
diameter, and exposed pits and ponds shall be screened, netted or
covered. Upon written application by the operator, an exception
to screening, netting or covering of a facility may be granted by
the district supervisor upon a showing that an alternative method
will protect migratory birds or that the facility is not
hazardous to migratory birds.

(h) (i)

(i) (j)

EXHIBIT "C"
CASE NO. 9672
Order No. R-8952

RULE 313. EMULSION, BASIC SEDIMENTS, AND TANK BOTTOMS

Wells producing oil shall be operated in such a manner as will
reduce as much as practicable the formation of emulsion and basic
sediments. These substances and tank bottoms shall not be allowed
to pollute fresh waters or cause surface damage. If tank bottoms
are removed to surface pits, the pits shall be fenced and the
fence shall be kept in good repair. To protect migratory birds,
all tanks exceeding 16 feet in diameter, and exposed pits and
ponds shall be screened, netted or covered. Upon written
application by the operator, an exception to screening, netting
or covering of a facility may be granted by the district
supervisor upon a showing that an alternative method will protect
migratory birds or that the facility is not hazardous to
migratory birds.

EXHIBIT "D"
CASE NO. 9672
Order No. R-8952

RULE 711. COMMERCIAL SURFACE WASTE DISPOSAL FACILITIES

I. To protect migratory birds, all tanks exceeding 16 feet in
diameter, and exposed pits and ponds shall be screened, netted or
covered. Upon written application by the operator, an exception
to screening, netting or covering of a facility may be granted by
the district supervisor upon a showing that an alternative method
will protect migratory birds or that the facility is not
hazardous to migratory birds.